Thursday, August 11, 2011
Stop listening to all the propaganda about the debt. It's WRONG!
In 2008 the deficit was $450 bln and the national debt was $9 trillion. The dollar index hit a low of 70.68.
This year the deficit is forecast to hit $1.6 trillion and the national debt is $14.5 trillion. The dollar index is at 74.57. THE DOLLAR WENT UP!!!!!!!!!!!
The growth of the debt/deficit had ZERO impact on the dollar. It went UP!
Interest rates on 10 year Treasuries went from 4.0% then, to 2.1% now!
Stop listening to the propaganda about the debt. The facts above PROVE that all the hysteria is WRONG. The growth in the debt is NOT inflationary, it’s NOT debasing the dollar, it’s NOT causing interest rates to skyrocket. All of that IS bulls—t!!!!!
Paulson Flagship Fund Hit Hard by Market Rout
CNBC has apparently received some inside information on the recent performance of hedge funds managed by John Paulson. Excerpt:
Previously it was reported that he was bearish on Treasury bonds which have rallied lately:
Hedge-fund titan John Paulson’s summer swoon continued last week, rendering his Advantage Plus Fund down more than 31 percent through Friday’s market close, according to people who have been briefed on the results.
Previously it was reported that he was bearish on Treasury bonds which have rallied lately:
In 2009, John Paulson made a different “call” that has yet to pan out; that is, the billion-dollar leader of Paulson & Co. expressed that monetary stimulus efforts by the Fed could only lead to inflation and higher treasury yields.
It would be interesting to see how these alleged losses in these hedge funds break down. If much losses have occurred due to a Treasury rally, it would be a shame for his investors if this short position was first entered into due to a belief that Fed purchases of Treasury securities is by itself inflationary.
Wednesday, August 10, 2011
Why I think things are not as bad as 8 days ago.
Anyone who has been following my comments for the past year knows that I have been warning about a sharp stock market and economic downturn for a while. The warnings go back to the midterm elections, which saw historic gains by the Republicans and most notably, lots of Tea Party candidates.
The fact that they embraced a set of very destructive beliefs--in fiscal austerity, dismantling of social safety nets, anti-environment, anti-labor, etc--made me feel that we would begin to head off in a new and dangerous direction.
In January of this year I released my 2011 Yearly Outlook and I predicted weakness in the second half and beyond. This was before Goldman, Morgan Stanley, JP Morgan Chase or anyone else.
I also spoke about the potential turbulence that could come about as a result of the debt ceiling debate and I even raised the possibility of a U.S. default. In addition I predicted that the rating agencies would downgrade the America's credit rating, and I said this going all the way back to 2007.
All of these things came true.
The question is, what now?
Unfortunately, I don't see a broad-based embrace of MMT or similar policies that would put us back on the right track. The Austerians remain firmly in charge both here and around the world. If anything, the movement in this direction has accelerated though I do admit that there has been a small bit of progress in getting the MMT message out thanks to our little community of dedicated believers, some of whom contribute to this blog.
The gloomy longer-term outlook aside, the market turmoil that we're seeing now just doesn't seem justified to me. The selling appears to be completely indiscriminate and utterly panicky, when it should be time to breath a sigh of relief.
That's right, I said breath a sigh of relief.
The reason I say this is because the storm may be over, at least for now. We got the debt ceiling increase and we got it with no concomitant cuts in spending, at least until 2013. That's good thing. If we hadn't got the debt ceiling increase the government would have been forced into operating in "balanced budget mode," meaning that $130 bln per month of income would have been sucked out of the economy.
By the same logic, the fact that we didn't get spending cuts is also good, because with the economy as weak as it is and with unemployment so high, spending cuts would have been a killer. At least we don't have to worry about this for the next two years and by then we could have a completely different government from top to bottom for all we know.
These are good outcomes and they are real--they're a reality at this moment.
But that's not the end of the story. Other good things have happened. We see oil prices 8-month lows and that will translate into lower gasoline prices at the pump. Consumers will see some much needed cost savings and they'll be able to use that extra money on other stuff instead of gas. Commodity prices in general have come down and that's a positive, too.
Bank lending is also finally starting to pick up. Total loans and leases at commercial banks are now at the highest level of the year, up some $100 bln from the March lows and loans outstanding are nearly positive on a year-over-year basis for the first time since the crisis began three years ago.
In addition, there is talk of a jobs stimulus and the president is also asking for an extension of the payroll tax cut. By the way, the payroll tax cut was a measure first recommended by the MMT community way back in 2008.
Finally, interest rates have fallen to historic low levels and that happened despite the idiotic and terribly misinformed downgrade issued by S&P. It hurt our pride as Americans to see that AAA go, but now it's done. We will do our mourning and get over it like any loss and then we will realize how stupid and immaterial the credit rating agencies are. What happened following the downgrade anyway? Bonds rallied and interest rates plummeted. That was the market expressing a huge, "no confidence" vote on S&P.
Maybe the best thing of all is that we see more and more of MMT getting out there in the blogs and being talked about, usually without attribution and usually coming under attack. But hey, bad publicity is still better than no publicity as they say. We'll take it and we'll defend ourselves. (And we do it intelligently and well!)
Bottom line, there is hope. Things are less bad than they were just a month ago. Actually, they're less bad than they were just 8 days ago. My outlook has shifted a bit and I don't think this wanton selling is justified. We may still be in the storm, but we've just entered a clear patch and I think that clear patch will persist for a while until the rest of the storm comes along. And maybe, just maybe, it'll pass us by.
Tuesday, August 9, 2011
"Who's gonna buy them now?"
Remember Bill Gross's infamous Tweet on June 30th when he wondered aloud who will buy Treasuries now that QE2 was ending.
Well despite the end of Quantitative Easing and a first-ever downgrade in the U.S. credit rating by a major ratings agency, the 10-year Treasury yield is now more tha ONE FULL PERCENT below the level where Bill Gross worried aloud publicly.
You'd think a guy who runs over $200 bln of bond money and who's dubbed, "The Bond King," would know something about bonds.
Zezza — US Employment Path Leads Into The Woods
It's short and to the point.
Latest polling — Washington Disconnect
Eric W. Dolan at The Raw Story: Poll: 62 percent say debt ceiling deal benefits the rich and hurts the poor
Sixty-two percent of Americans think the bill that raises the federal's debt ceiling through the year 2013 and makes major cuts in government spending benefits the rich at the expense of the poor and middle class, according to a CNN/ORC poll released on Monday....The poll (PDF) also found that 47 percent of Americans rate the economy "pretty badly" and 28 percent rate it "very badly." Only 23 percent think the economy is going "fairly well" and a meager 1 percent say it is going "very well."Another CNN/ORC poll (PDF) released Monday found that 60 percent of Americans think the economy is the most important issue currently facing the nation. In contrast, only 16 percent think the federal budget deficit is the most important issue and only 9 percent think health care is the most important issue.More specifically, 49 percent of Americans think unemployment is the biggest economic issue, 27 percent think the federal budget deficit is the biggest issue, 12 percent think the price of gasoline is the biggest issue and 5 percent think the tax rate is the biggest issue.
Is the public ready for MMT-based policy solutions? Sounds like it.
Monday, August 8, 2011
Evolution and egalitarianism — return on cooperation and coordination
Good summary of evolution and egalitarianism. The ability to cooperate and coordinate vastly increase the adaptive rate of humans in the evolutionary chain. Civilizations are the record of return on coordination.
Low hierarchy does not mean no hierarchy. Through ethnographic and cross-cultural studies, researchers have concluded that the basic template for human social groups is moderately but not unerringly egalitarian. They have found gradients of wealth and power among even the most nomadic groups, but such gradients tend to be mild. Ina recent analysis of five hunter-gatherer populations, Eric Aiden Smith of the University of Washington and his colleagues found the average degree of income inequality to be roughly half that seen in the United States, and close to the wealth distribution of Denmark.Interestingly, another recent study found that when Americans were given the chance to construct their version of the optimal wealth gradient for America, both Republicans and Democrats came up with a chart that looked like Sweden’s.
Read it all at The New York Times: Thirst for Fairness May Have Helped Us Survive
It's the population growth, stupid.
Paleontologist Peter Ward talks about the threats from global warming, rising population and our own plain stupidity.
The previous post was optimistic. This keeps things "fair and balanced."
Solar Thermal
Most of the talk about renewable energy is aimed at electricity production. However, most of the energy we need is heat, which solar panels and wind turbines cannot produce efficiently. To power industrial processes like the making of chemicals, the smelting of metals or the production of microchips, we need a renewable source of thermal energy. Direct use of solar energy can be the solution, and it creates the possibility to produce renewable energy plants using only renewable energy plants, paving the way for a truly sustainable industrial civilization.
DFH's and many living off the grid have been using small scale solar furnaces and stoves for decades. This is about scaling up that technology.
Think about it. Earth is pretty much a closed system other than for the solar energy it is being bombarded with daily, for free.
Galbraith Kicks Butt — Must Read
You don't want to miss this one. Just read it.
Joshua Holland takes Standard and Poor's to the Woodshed
S and P's downgrade provides compelling evidence of the corruption eating away at the foundations of yet another key Wall Street institution.
Standard and Poor's decision to downgrade our public debt tells us absolutely nothing about the probability of the federal government meeting its future obligations. The move really only offers us some compelling evidence of the corruption eating away at the foundations of yet another key Wall Street institution.
I should say that it offers us additional evidence. According to a Senate investigation concluded earlier this year — a probe that was greeted with a collective "ho-hum" by the corporate media — S&P and Moody's, another leading agency, “issued the AAA ratings that made ... mortgage backed securities ... seem like safe investments, helped build an active market for those securities, and then, beginning in July 2007, downgraded the vast majority of those AAA ratings to junk status.” And when they did, it “precipitated the collapse of the [mortgage-backed securities] markets and, perhaps more than any other single event, triggered the financial crisis. (PDF)”
According to the Senate investigation, in the years leading up to crash, “warnings about the massive problems in the mortgage industry” — including internal warnings from their own analysts — had been ignored because of the “the inherent conflict of interest arising from the system used to pay for credit ratings” — the big “rating agencies were paid by the Wall Street firms” that were making a fortune selling that glossed-up garbage to credulous investors.
The almost surreal irony here is that it was the economic crisis that the ratings agencies facilitated which led to a massive drop in tax revenues, and it was that, more than any other single factor, which caused the large deficits the federal government has been running in recent years. In other words, the agencies themselves played a pivotal role in driving up the national debt. Yet, rather than doing the honorable thing and throwing themselves out of their high-rise windows in the wake of the crash, S&P's management had the nerve to start playing politics with that very same debt....
Clear, crisp, trenchant analysis, and Joshua is pretty much in paradigm, too.
Sunday, August 7, 2011
A UK Conservative's Lament
It has taken me more than 30 years as a journalist to ask myself this question, but this week I find that I must: is the Left right after all? You see, one of the great arguments of the Left is that what the Right calls “the free market” is actually a set-up.The rich run a global system that allows them to accumulate capital and pay the lowest possible price for labour. The freedom that results applies only to them. The many simply have to work harder, in conditions that grow ever more insecure, to enrich the few. Democratic politics, which purports to enrich the many, is actually in the pocket of those bankers, media barons and other moguls who run and own everything....
Read it the rest by Charles Moore at the Telegraph: I'm starting to think that the Left might actually be right
(h/t Stephan Ewald)
James K. Galbraith on Economic Consequences of Rising Resource Costs
This is joint work with Jing Chen and it’s work in progress addressed to a question that we believe has not be adequately dealt with, in fact barely dealt with at all, in any major tradition — neither in the mainstream nor in the Keynesian or progressive responses to the crisis so far.The question that we are addressing, that we would like to address, is to the implications of rising resource costs for economic systems in general and for the structure of economic society.Our approach is to treat the economy as having the same form as a biophysical system — something that it obviously does — insofar as economic life is part of human life and involves interaction between organized society and the natural world.The meaning of this idea, in essence, is that you have to be able to get more value out of your environment than it costs to extract it. Otherwise, you cannot live.That is true for any form of living organism and it ought to be true, certainly is true, for society as a whole....
Read the rest at FireDogLake: James K. Galbraith: The Implications of Rising Resource Costs for Economic Systems
This is an important talk given by Prof. Galbraith at the Association for Evolutionary Economics (AFEE) session of the Allied Social Sciences Association (ASSA) meeting on January 9, 2011. It was transcribed by selise, who posted it to her diary at FireDogLake. Thanks, selise.
Saturday, August 6, 2011
Dean Baker on the US Downgrade
In short, there is no coherent explanation that can be given for S&P's downgrade. This downgrade was not made based on the economics. We can only speculate about the true motive.
Barefoot Economics
AMY GOODMAN: Today we begin with acclaimed Chilean economist Manfred Max-Neef. He won the Right Livelihood Award in 1983, two years after the publication of his book Outside Looking In: Experiences in Barefoot Economics. I sat down with Manfred Max-Neef in Bonn, Germany, at the 30th anniversary of the Right Livelihood Awards. I began by asking him to explain just what "barefoot economics" is.MANFRED MAX-NEEF: Well, it’s a metaphor, but a metaphor that originated in a concrete experience. I worked for about ten years of my life in areas of extreme poverty in the Sierras, in the jungle, in urban areas in different parts of Latin America. And at the beginning of that period, I was one day in an Indian village in the Sierra in Peru. It was an ugly day. It had been raining all the time. And I was standing in the slum. And across me, another guy also standing in the mud — not in the slum, in the mud. And, well, we looked at each other, and this was a short guy, thin, hungry, jobless, five kids, a wife and a grandmother. And I was the fine economist from Berkeley, teaching in Berkeley, having taught in Berkeley and so on. And we were looking at each other, and then suddenly I realized that I had nothing coherent to say to that man in those circumstances, that my whole language as an economist, you know, was absolutely useless. Should I tell him that he should be happy because the GDP had grown five percent or something? Everything was absurd.So I discovered that I had no language in that environment and that we had to invent a new language. And that’s the origin of the metaphor of barefoot economics, which concretely means that is the economics that an economist who dares to step into the mud must practice. The point is, you know, that economists study and analyze poverty in their nice offices, have all the statistics, make all the models, and are convinced that they know everything that you can know about poverty. But they don’t understand poverty. And that’s the big problem. And that’s why poverty is still there. And that changed my life as an economist completely. I invented a language that is coherent with those situations and conditions....
The rest at Chilean Economist Manfred Max-Neef on Barefoot Economics, Poverty and Why The U.S. is Becoming an "Underdeveloping Nation" (Video and transcript at Democracy Now).
Standard & Poor Excuse for a Ratings Agency
Mike predicted this years ago and finally the S&P ratings agency has "downgraded" the U.S. credit rating to "Outlook Negative".
Link to the S&P announcement here.
Others within the MMT paradigm have pointed out that perhaps S&P should downgrade the US rating due to the fact that intransigent deficit reduction fetishists operating within the government often push the US Treasury to the brink of default at the times when the US reaches the so-called "debt" ceiling; and therefore, for a lack of effective willingness to pay, the US perhaps could receive a downgrade. Here is S&P on this:
The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.So you can see S&P comes close to a realization of this concept of willingness here, pointing out the reckless behavior of those in government around the "debt" ceiling issue. But close is all we get from them, S&P then goes full moron:
Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures.Too bad they cannot see that with the US Treasury, "willingness to pay" is the only issue. Look for this ratings issue to be a major topic in the financial media next week.
Aside: You know, all of this when we have troops in the field in harms way getting shot at everyday. This garbage from S&P and then the previous statements from PIMCO's Gross (remember "who will buy them now?"). What would people have thought of these types of statements and actions during WW2 when the Treasury was selling "war bonds"? To me it is the same thing.
Friday, August 5, 2011
Fiscal Flows During the Period of Operating at the "Debt" Ceiling
Below are some calculations from data from the Daily Treasury Statements for fiscal YTD as of May 16th (debt ceiling hit) and July 29th (debt ceiling raised).
May 16th
Deposits:
Total Deposits: $7123
Treasury Securities Issued: $5176
Net Deposits: $1947
Withdrawals:
Total Withdrawals: $7299
Treasury Securities Redeemed: $4492
Net Withdrawals: $2807
So net spending was: ($2807 -$1947)= $860
Spending per month = $860/7.5 months = $115B/month for this FY thru May 16th.
July 29th YTD:
Deposits:
Total Deposits: $9134
Treasury Securities Issued: $6608
Net Deposits: $2526
Withdrawals:
Total Withdrawals: $9376
Treasury Securities Redeemed: $5799
Net Withdrawals: $3577
Net spending through July 29th = $3577- $2526 = $1051B
If we isolate the rate of net spending just for the 2.5 months between May 16th and July 29th:
The YTD net spending changed from $860 as of May 16th to $1,051 as of July 29th. This is a total of an additional $191 over those 2.5 months. This is a rate of only $76B per month.
So the fiscal impact of the governments inactivity during the 2.5 months of useless arguing about the so-called "debt" ceiling: Fiscal was reduced from a previous $115B/mo. rate to a $76B/month rate.
This is a substantial hit to this flow measure (a hit of -$39B per month). As the previous rate of savings desires of the non-govt sector was seemingly satisfied at the $115B/mo. rate, this forced fiscal drag of -39B/mo. has to be accounted for somewhere (probably consumption).
Perhaps the stock market has been pricing in this 10 week application of substantial fiscal drag. Hopefully this rate of fiscal flow will quickly revert back to the previous level and we can get back to "muddle through" in a couple of months.
Sow the Wind, Reap the Whirlwind
The word "West" used to have a meaning. It described common goals and values, the dignity of democracy and justice over tyranny and despotism. Now it seems to be a thing of the past. There is no longer a West, and those who would like to use the word -- along with Europe and the United States in the same sentence -- should just hold their breath. By any definition, America is no longer a Western nation.The US is a country where the system of government has fallen firmly into the hands of the elite. An unruly and aggressive militarism set in motion two costly wars in the past 10 years. Society is not only divided socially and politically -- in its ideological blindness the nation is moving even farther away from the core of democracy. It is losing its ability to compromise.America has changed. It has drifted away from the West.
Jacob Augstein in Der Spiegel. Read the rest at Once Upon a Time in the West
America destroying its global image?
You may ask, What has this to do with MMT? MMT is more than a description of the monetary system. It is also an economic theory that takes into account social, political, and economic consequences of action. These cannot be separated absolutely in an economic theory because they feed into each other. Most mainstream economic theory fails to include this insight in its preoccupation with numbers.
Vital US alliances and partnerships are blowing up. This will reduce trust and affect cooperation and coordination, which has far-reaching consequences in an era in which influences are international and global.
Thursday, August 4, 2011
Love, Prostitution and Economics
Do you know the difference between love and prostitution? Or even better, the difference between love and prostitution as it relates to economics?In Economics For A Civilized Society, Paul and [son] Greg Davidson examine that question, among others you might not have expected in a book on how our economic system should work. But there is actually a direct correlation between love and prostitution and the sort of cost-benefit analysis mindset that fuels the way we’ve been convinced over recent decades to look at and think about the economy. The authors write that in a free market vision, “prostitution is a valuable service that some people are willing to pay for, while love is not for sale and therefore is worthless.” They observe that “this philosophy of market valuations provides the basis for all values in conservative economics.”Love won’t pay the bills. Yet would you want a society without it?
Read the whole at post at New Deal 2.0, Love, Prostitution and Economics
Total Gov't debt issued since 1998: $229 TRILLION! And guess what? Rates are at zero!!
The daily Treasury statement is a fascinating document. Each day at 4pm on the dot you get a look at the Treasury's checkbook. Every item of expenditure (withdrawals) and every item of revenue (deposits) is shown in detail down to the dollar. And it's compiled to give daily, monthly and fiscal year to date totals.
Also included in that statement are the total amount of public debt that the Treasury has issued. This includes bonds and notes along with T-bills, savings bonds and whatever other debt the Treasury sells.
The numbers are really unbelievable and they shed light on how we really just live in a world of "Monopoly money." I don't mean that in a pejorative sense; I simply mean that this is all just a matter of accounting and record keeping, that's it. Nothing more than that. And the reason you know that's true is because the trillions $$ that come in and out on this statement are just mind boggling. There's not that much money in the whole, entire, world, yet there it is, in black and white, right on the Treasury's books.
For example, here's one crazy number: $53.7 Trillion. That's the amount of public debt that has been issued by the Treasury so far this fiscal year. (Less than 10 months.) Fifty-three T-R-I-L-L-I-O-N!
See for yourself by looking at the statement below:
I bring this up because the only thing we hear about, every day, is what a huge debt we have ($14 trillion) and that we ought to be scared because there is massive "supply" of Treasuries (usually only 10s of billions $) about to be auctioned off. (This usually comes as a rant from resident CNBC imbecile, Rick Santelli).
We are also told that this supply is going to cause rates to spike or that no one is going to buy this paper. OMG, what if the Chinese don't step up and buy?
Yet the fact is, the government has already sold nearly $54 trillion of debt in the last 10 months with no trouble or consequence. That is nearly four times the outstanding national debt (which took 220 years to accumulate). We sold four times that in 10 months and what happened? Nothing. Rates are at ZERO!
Even more enlightening is the fact that over the past 13 years (as far back as this data goes) the Treasury has sold a mind-numbing $229 trillion of debt and rates have gone down to zero.
I went back and jotted down the total annual debt sales that the Treasury has conducted from 1998 until now. (All came from the archives of the Treasury Statement.)
Here it is:
And finally, here's what interest rates did over that time when we issued $229 trillion of debt:
Fed funds 5.5% to zero
2yr note 5.5% to 28 basis points
5yr note 5.5% to 1.15%
10yr note 6% to 2.5%
30yr bond 6% to 3.7%
So my question is, when are we going to stop with this ridiculous hysteria about gov't debt issuance, spiking rates, our national debt "problem," and all the other nonsensical talk that we have been hearing? It's really worse than any warped myth.
Excellent summary of MMT
Excellent summary of MMT by a "newbie." It's an excellent reference for getting people up to speed on MMT quickly. Lots of links, too. Check it out. What you do think? I was really quite astonished by it.
Update: Johnsville follows up with an excellent post on Proof PlatinumCoin Seigniorage. (h/t Clonal)
Ron Paul introduces bill to cancel $1.6 trillion debt held by the Fed
The first good idea EVER from Ron Paul. The Fed could essentially rip up its holdings of Treasuries and the US debt would be lowered by $1.6 trillion. This is pretty much what Rand is proposing. It's a good idea and it shows the fallacy of the debt and how easy it is to “pay it back.”
The Fed is the largest single holder of U.S. bonds and notes. The Treasury pays interest to the Fed on those holdings. So the government (the Treasury) is paying interest to an agency of the government (the Fed). Then the Fed pays the Treasury back that interest. How idiotic is this???
Why are we holding ourselves hostage to debt terrorists and the rating agencies when it all can be solved so easily? Crazy!!
Here is the article on Ron Paul's proposal.
Tuesday, August 2, 2011
Monday, August 1, 2011
Alternet Article on Bitcoin
Interesting article on Bitcoin's inception and how it works. Bitcoin is a purely virtual, digital, online, non-state "currency" that can be used for purchases in a network that accepts it, as well as be exchanged for state currencies internationally in its network. It seems to be catching on.
The "deal" and the numbers that go with it
All the media is decrying the wonderful "deal" over the weekend that had us avert default. Republicans are grinning ear to ear. Democrats are saying, it's the best we could do.
So here's the deal in a nutshell:
$1 trillion in spending cuts now. Then around Thanksgiving a bipartisan "panel" of six lawmakers decide on another $1.2 trillion in cuts that will go into effect in 2013. This decision of this panel, by the way, is final and not subject to amendment or filibuster. (More on that later.)
Let's go over the numbers:
$1 trillion in cuts equates to about 0.7% of GDP. That's a SUBTRACTION of 0.7%. Given that the economy grew at 0.4% in Q1 and 1.3% (preliminary) in Q2, we'll average that together and say that the economy is growing at around a 0.8% rate.
Now do this math: 0.8 - 0.7
You got that? (I know it's tough, but I believe most of you can do it.)
Okay, that means after these cuts the economy will be growing at 0.1% FOR THE NEXT 10 YEARS!
Right...no growth for the next 10 years. Nice!
But wait...we forgot about the additional $1.2 trillion of cuts that happen in 2013 and beyond.
We'll start with the very, VERY, optimistic asumption that the economy is still around $14 trillion at that time. (In all likelihood it will be far lower.) That means from 2013 on, the economy SHRINKS by 1.0% percent per year as far as the eye can see.
Somehow the Republicans equate this to growth. (Ah, yes, the "Confidence Fairy" at work.)
What this means is that AMERICA WILL NEVER AGAIN CATCH UP to other nations who's policies are fostering growth right now. It will be IMPOSSIBLE to catch up. Our standard of living is about to embark on an irreversible decline vis-a-vis other nations. We're done.
And what about the bipartisan spending cut panel who's powers make it exempt from normal, Constitutional procedure? Well folks, we've just experienced a coup d'etat. Aren't you happy you went to the voting booth and voted for your Congressional representatives and Senators? Your vote means nothing. Your future will be decided by six guys who just gave themselves unlimited power.
Nice to live in a democracy, isn't it?
Hi ho, hi ho, austerity we go!
Sunday, July 31, 2011
Happiness Economics: A Report
Happiness is, in the end, a much more complicated concept than is income. It is also a more ambitious and laudable policy objective. The fact that it is seriously on the table reflects what a parameter-shifting moment it is in economics and in policy debates more generally. Indeed, at a time when so many of our public and political debates are divided and contentious, exploring new parameters and metrics that provide tools for evaluating the wellbeing of our citizens rather than emphasising the roots of their divide is a welcome change. For those of us studying the topic, this change provides great impetus to get the nascent science right.
Read the whole post at VOX: Happiness economics: Can we have an economy of wellbeing?
This is a good short summary of the state of the field and the principle issues. I suspect that this is going to be a burdgeoning field of research in the future and one in which economists will work cooperatively with other social scientist and social philosophers.
Subscribe to:
Posts (Atom)